THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: Happening now, President Bush's urgent demands to Congress. It concerns protections for U.S. workers, a controversial trade proposal for a U.S. ally, and a deal that has forced the oust of a top Hillary Clinton adviser. John McCain says Clinton and Barack Obama are making promises they won't be able to keep about Iraq, even suggests some of their pledges are based on ambition, not honesty.

And pro-wrestler-turned-governor says, when he thinks about Clinton, McCain and Obama, he says he wishes he could vote -- quote -- "none of the above." Jesse Ventura is here. He says he's flirting with the idea, and a specific idea, that's causing some anger in Washington. We will tell you what's going on.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Right now, a confrontation looms between the president and the Congress. President Bush demands lawmakers act fast on a controversial free trade agreement with Colombia, essentially forcing a vote within 90 days. The president says the economic and security benefits the deal would provide the United States make its approval a matter of urgency.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: President Uribe has told members of Congress, and me as well, that approving the free trade agreement is the best way for America to demonstrate our support for Colombia.

People throughout the hemisphere are watching to see what the United States will do. If Congress fails to approve this agreement, it would not only abandon a brave ally; it would send a signal throughout the region that America cannot be counted on to support its friends.

(END VIDEO CLIP)

BLITZER: Meanwhile, this issue is playing out on the campaign trail for Democrats who oppose this deal. Caught up in this drama is the man whose support for it cost him his job in Hillary Clinton's campaign.

His -- his role in this Colombia free trade agreement deal really was something that, I guess, broke the camel -- the straw on the camel's back.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely. We're talking about Mark Penn, who was the senior strategist for the Clinton campaign. He has now been demoted. He has not been ousted.

But he used to be the senior strategist, and he's now a strategist within the Clinton campaign. It all had to do with free trade deals.

(BEGIN VIDEOTAPE)

BUSH: Thank you. Please be seated.

CROWLEY (voice-over): President Bush can bank on two loud Nos when the Colombian free trade deal hits Capitol Hill. If you're campaigning for the working-class vote in Pennsylvania and speaking before the AFL-CIO, to boot, no is the only answer.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Because the violence against unions in Colombia would make a mockery of the very labor protections that we have insisted be included in these kinds of agreements.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: We have got to have new trade policies before we have new trade deals. And that includes no trade deal with Colombia while violence against trade unionists continue in that country.

(APPLAUSE)

CROWLEY: Many Americans blame job losses on free trade agreements. The argument is that, without tariffs, other countries, with lower wages and less stringent environmental laws, undersell U.S. manufacturers, eventually putting them out of business.

Over the weekend, the issue pushed a top Clinton official out of a job. Senior campaign strategist Mark Penn, also a top executive in a P.R. firm, stepped down after it was revealed he met with Colombian officials to talk about promoting the Colombian trade deal Hillary Clinton opposes.

Penn said he was representing the P.R. firm and apologized, but Pennsylvania Governor Ed Rendell, a strong Clinton supporter, suggested Penn should be fired, as did several union leaders. By Sunday, Penn was out of a job.

QUESTION: Any comment about Mark Penn?

CROWLEY: The candidate has been all smiles and no talk about Penn's departure, but a source claims she was furious with him about the meeting. In truth, this was an exit waiting to happen. Penn has been the source of friction inside the campaign, where some blame him for a strategy that has left the once front-running Clinton struggling to stay in the race.

(END VIDEOTAPE)

CROWLEY: Nonetheless, the Clinton campaign says this was about the trade deal, not about anything else, and also emphasized that Penn may be out as the senior strategist, the top guy, but he is still a strategist on the Clinton campaign, and, in fact, was on the morning call this morning -- Wolf.

BLITZER: Interesting.

There's another development, a significant development -- Senator Clinton going out of her way to make a recommendation how the U.S. should behave at the opening ceremonies at the Olympic Games in Beijing.

CROWLEY: Absolutely.

Hillary Clinton today put out a statement and said that she thinks the president ought to boycott the opening ceremony of the Beijing Olympics. So, this is the first time either she or Obama has gone that far. Obama says he's of -- of mixed feelings, at least about boycotting the Olympics in general. We haven't yet heard from him about whether he thinks this boycott of the opening ceremonies would be a good idea.

BLITZER: Of the symbolic opening ceremonies.

CROWLEY: Right.

BLITZER: So, she's following the recommendation of Nancy Pelosi, the speaker, who called for that the other day as well.

CROWLEY: Right.

(CROSSTALK)

BLITZER: Just boycotting the opening ceremony, but not the Olympic Games in general.

CROWLEY: Exactly.

BLITZER: All right, Candy, thanks very much.

In the past nine years, the United States exported fewer goods to Colombia than it imported from that country. President Bush urges that a U.S.-Colombian free trade agreement would level the playing feel for American businesses and workers.

Right now, most Colombian imports enter the United States duty free. Yet, U.S. industrial and consumer exports to that country face high tariffs, some up to 35 percent. For U.S. agricultural products, that can be even higher. If the deal the president is urging passes, it would eliminate tariffs on many of those exports immediately.

We're watching this story. We will go to the White House later for more.

One day before the top U.S. commander in Iraq and the U.S. ambassador to Iraq testify before Congress on the war situation, John McCain is blasting Democrats over Iraq. McCain says Barack Obama and Hillary Clinton are promising a troop withdrawal, if they're elected, regardless of any chaos that might -- that that might cause for the Iraqis.

Let's go to Mary Snow. She's out in Kansas city, Missouri. She's watching this story for us.

There were some pretty strong words, Mary, from McCain today.

MARY SNOW, CNN CORRESPONDENT: Yes, there were, Wolf. He used the words reckless and irresponsible and said the nation's interests must come before political ambitions.

And he came to this World War I museum to deliver his message.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Senator John McCain warned his Democratic rivals that a quit exit from Iraq is reckless.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: To promise a withdrawal of our forces from Iraq, regardless of the calamitous consequences to the Iraqi people, our most vital interests, and the future of the Middle East, is the height of irresponsibility. It is a failure of leadership.

SNOW: Senators Hillary Clinton and Barack Obama have said that McCain wants to continue the failed policies of the Bush administration. McCain isn't setting a timetable for U.S. troops to withdraw, but he says the goal of Iraq standing on its own may be sooner than many imagined. And he says, from June of last year, until his trip to Iraq last month, violence has decreased, thanks to the surge.

MCCAIN: We are no longer staring into the abyss of defeat. And we can now look ahead to the genuine prospect of success.

SNOW: McCain's call to keep troops in Iraq comes as two-thirds of Americans polled say they oppose the war.

McCain came under fire from liberal talk show host Ed Schultz, who last week called McCain a war-monger, and is refusing to apologize.

ED SCHULTZ, RADIO TALK SHOW HOST: His policies fit the description. War-monger is a label. It is not a personal shot at John McCain.

SNOW: In response, McCain said people are free to say what they want. But, as he makes his case for keeping troops in Iraq, he has tapped his own personal feelings about his military service.

MCCAIN: I hold my position on Iraq not because I am indifferent to the suffering caused by this war, but because I detest war.

SNOW: And it's the war, say political observers, that is key to McCain's campaign.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: John McCain and Iraq are like Siamese twins in this campaign. They are totally tied together. The fate of one could very definitely affect the fate of the other.

(END VIDEOTAPE)

SNOW: And, Wolf, besides calling for troops to remain in Iraq, McCain is also asking for reconstruction assistance, saying that building an economy that is strong in Iraq is key to its success -- Wolf.

BLITZER: What are you hearing about another potentially significant endorsement from John McCain?

SNOW: Well, you know, Reuters was quoting Alan Greenspan, the former Federal Reserve chairman, as saying that he was endorsing John McCain.

We just got a statement from Alan Greenspan's office saying, "I'm a Republican and expect to vote for the Republican candidate, but I am not involved in politics." And the McCain campaign just sent us a statement saying that earning Dr. Greenspan's respect and endorsement is of enormous importance to John McCain and saying it should reassure voters that he is the best candidate to tackle economic issues -- Wolf.

BLITZER: All right, thanks very much, Mary, for that.

Mary is out in Kansas City for us.

Let's go back to Jack Cafferty. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Probably not the greatest weekend ever for Hillary Clinton. Her campaign demoted senior aide Mark Penn yesterday. He got the boot after it was revealed he was working on behalf of a trade deal with Colombia that she opposes.

Penn's demotion comes as Clinton trails her rival, Barack Obama, in pledged delegates and the popular vote, and as Obama continues to cut into her lead among superdelegates. Obama is also closing in on Clinton in the ever-important state of Pennsylvania. He's narrowed her one-time lead of more than 30 points to an average now of just seven. And, in one poll, the two of them, in fact, are tied.

There's more. Friday, the campaign made public that Hillary and Bill Clinton's tax returns for the seven years since they left the White House showed a mother lode of cash, former first couple, $109 million in that period of time, mostly through speeches and book deals. Clinton says she has, "absolutely nothing against rich people."

But it could be a tough sell with some of those essential working-class voters in Pennsylvania. And, it turns out, the claims that Clinton has often made on the stump about an uninsured pregnant woman in Ohio who died after being denied hospital treatment aren't true.

The hospital raised questions about the accuracy of the story, saying the woman did have insurance, was not denied treatment. Clinton's campaign says, even though it has no reason to doubt the story, it can't confirm the details, so she has now dropped it from her speech.

Doesn't look so good, coming on the heels of that sniper fire story in Bosnia.

Here's the question: How can Hillary Clinton turn things around in the next couple of weeks heading up to the Pennsylvania primary?

Go to CNN.com/caffertyfile. You can post a comment on my blog -- Wolf.

BLITZER: All right, Jack, thanks very much.

Jack Cafferty has got "The Cafferty File."

For anyone not impressed with Barack Obama, Hillary Clinton and John McCain, one outspoken former governor -- governor is pushing a critical alternative.

(BEGIN VIDEO CLIP)

JESSE VENTURA, FORMER GOVERNOR OF MINNESOTA: You know what I wish they had in the United States, Wolf? I wish they had on all the ballots, be it local, state or federal, "none of the above."

(END VIDEO CLIP)

BLITZER: So, what does Jesse Ventura have against the candidates? He's here in THE SITUATION ROOM. And even tells me he's flirting with another possible run for office.

Is Condoleezza Rice privately waging a campaign to become John McCain's running mate? And, if that were true, why might that hurt McCain more than help him?

And Bill and Hillary Clinton's tax returns show their spirit of giving. So, why are there questions over one specific charity they gave to?

Lots more news -- coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Jesse Ventura says the two-party system in the United States is doing harm to the United States. But does he think one of the presidential candidates is the answer?

(BEGIN VIDEOTAPE)

BLITZER: And joining us now, the former Governor of Minnesota Jesse Ventura. He is out with a brand-new book entitled "Don't Start the Revolution Without Me."

Governor, how could they start a revolution without you? That simply isn't going to happen.

VENTURA: Well, I look at it this way, Wolf. I'm hoping that they do. You know, that's one of the questions I raise. Do I have to come back here and start it?

BLITZER: When you say come back here -- we're going to get to this -- you have been spending a lot of time in Mexico lately. Hold on for a moment on that.

Let's talk presidential politics right now. Correct me if I'm wrong. You don't like Hillary Clinton. You don't like Barack Obama. You don't like John McCain. So, who are you going to vote for?

VENTURA: Well, you know what I wish they had in the United States, Wolf? I wish they had on all the ballots, be it local, state or federal, "none of the above."

And everyone chuckles at that. But what that truly would mean is that: I'm here. I'm participating in the system. I'm voting, but it's also a vote of no confidence in your government.

And I believe strongly that, if they did that at local, state, and national, you would see none of the above occasionally win.

BLITZER: So -- so, what's wrong with these three presidential candidates?

VENTURA: Well, they're all part of the system. Look what the Democrats and Republicans have done right now.

You know, in the private sector, you work your whole life to save money and to leave your children something, whatever it might be. Well, in our public sector, what we're going to leave our children is a $9 trillion debt. That's where it's at right now, courtesy of the Democrats and Republicans, who have created it. And --

BLITZER: So, is there -- is there an independent candidate out there you would vote for?

VENTURA: Not right now, I don't think, because it's so difficult to get on the ballot. Look what they did to Ralph Nader. Whenever he would get ballot access, then they would sue him. They would tie it up in court, and they would hold it, until he couldn't get the ballot access. And that's, of course, what they call democracy, the two- party system.

BLITZER: So, you're not going to vote; is that right?

VENTURA: I don't know if I will vote or not. If I do vote, I will pick out somebody, the Libertarian, the Green Party. I know that I will vote for anything but a Democrat or Republican.

BLITZER: What would you like to hear General David Petraeus say tomorrow when he testifies before Congress?

VENTURA: I would like him to say we're on the verge of pulling out of Iraq, a war we should have never gone into in the first place. You know, when you live outside the country, like I do, Wolf, you see the country from the outside looking in. That's a whole different perspective sometimes than the inside looking out.

We're not very liked. In fact, the most popular T-shirt I see down in Mexico, it has a picture of George Bush, and it says "Weapon of mass destruction" on it.

BLITZER: You agree with that?

VENTURA: Well, I agree with the fact we should have never gone in there. I mean, look at the Vietnam War. They lied to us about that. The Gulf of Tonkin incident, now McNamara has come out and said, never happened.

Iraq, there were no weapons of mass destruction. There were no ties to al Qaeda. Again, it's a war based on fraudulence intelligence, manipulation of that intelligence. And, from south Minneapolis, we call that lying.

BLITZER: What are you doing in -- living in Mexico now?

VENTURA: I'm learning how to surf, because I -- my new goal in life, I want to ride one wave with Laird Hamilton. It might kill me, but it will be something I would like to try.

BLITZER: Now, you were once a Navy SEAL, weren't you?

VENTURA: Yes, absolutely.

BLITZER: So, you know how to swim?

VENTURA: I know how to swim very well. I was a frogman. I have no fear of the water. But the only problem for me now is age. I'm 56.

BLITZER: Fifty-six. Well, you're still a relatively young guy. You have got a lot ahead of you.

Let's talk about Minnesota, your home state. You were the governor of Minnesota. There's a very important Senate contest that's going to happen this year, Al Franken, the comedian, now a serious Democratic politician, vs. the incumbent, Norm Coleman. Who do you support? VENTURA: Well, neither. You have got Norm Coleman, who is a chicken hawk. He wouldn't serve in Vietnam. He protested against it. Now he's rubber-stamped George Bush every vote he wanted for the war in Iraq.

Then you have got Al Franken, a carpetbagger. He hasn't lived in Minnesota for 30 years. I would be surprised if he even had a Minnesota driver's license. And, if he does, he just recently got it. Well, Wolf, look at it this way. What would happen to this race if I jumped in?

BLITZER: Well --

VENTURA: Because, you know -- you know, I have until July to file, don't I?

BLITZER: What are you going to do?

VENTURA: Oh, I don't know yet. I have got until July to decide.

BLITZER: You want to be a United States senator?

VENTURA: I don't know. I might look into it a little bit. I would sure cause a lot of hate and discontent in Washington if they sent me there.

BLITZER: Well, let me ask you this. What would be the big issue that you would challenge these two -- these two politicians over?

VENTURA: Over just that: Send somebody to Washington. Have the courage to break the stranglehold of the two-party dictatorship and send a true independent to Washington who's not controlled by special interests or their money, who could vote his conscience, and could truly represent the state of Minnesota, rather than the Democratic Party or the Republican Party.

BLITZER: It's interesting you say all this, because you came almost out of nowhere and got elected in a three-man race for -- for governor of Minnesota. So, what you're hinting at right now, you're thinking about doing the same thing in the Senate contest?

And you -- do you also not like these two guys personally? Is that part of it?

VENTURA: No, it has nothing to do with personality. It's got to do with their positions and what they stand for. Again, Mr. Coleman wouldn't serve in Vietnam. And, yet, today, he votes for everything to send our kids to war.

And, you know, sending someone to war, in my opinion, is really a simple decision, Wolf. You know what it comes down to? A war is justified if you're willing to send your son. If you're not willing to send your son, how do you send someone else's?

BLITZER: Jesse Ventura's book is entitled "Don't Start the Revolution Without Me."

Governor, thanks for coming in.

VENTURA: Wolf, always a pleasure. I look forward to it again, when you invite me back, if you will.

BLITZER: Certainly will. Appreciate it.

VENTURA: Thank you.

(END VIDEOTAPE)

BLITZER: Long lines, packed planes, fed-up passengers, but all airlines are not equal. The results are in, and the best and worst quality are revealed. You're going to find out which airlines came out on top and which are on the bottom. That's coming up next.

Plus, as America says goodbye to a Hollywood legend, some of my conversations with Charlton Heston over the years.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: The Clintons, as you know, they have released their tax information, including millions of dollars they donated. Some of that money went to a charity called the Clinton Foundation. What exactly is it? Whom does it help? You are going to find out. That's coming up.

Plus, the Democrats' so-called dream ticket, with both candidates on the ballot, one man is using the Internet to try to make that a reality -- why he says it just might work.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, a symbol of unity, the Olympic torch, parking anti-China protests around the world. Demonstrators scaled San Francisco's Golden Gate Bridge today, and protests forced the final leg of the Olympic torch relay through Paris to move to a bus. We have got much more on the story coming up. New violence rocking Baghdad -- once again, U.S. and Iraqi forces are battling Shiite militias in the Iraqi capital. Our own Nic Robertson will have details from the front lines. Stay tuned for that.

And U.S. lawmakers take on the foreclosure crisis. CNN's Jim Acosta will tell us how they're trying to stop predatory -- predatory lenders from driving you out of your home.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

During the last decade, Bill and Hillary Clinton made more money than most Americans will ever earn in their lifetimes. More than $100 million, to be exact. So, where is that money going?

Brian Todd has been following the money involving the Clintons.

What are you finding out, Brian?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, the money has gone to a lot of places you'd expect. The Clintons gave to their various alma maters, including the University of Arkansas, Georgetown University. They also gave to their church in Little Rock. But the timing of some other donations has raised questions.

(BEGIN VIDEOTAPE)

TODD (voice-over): A lot of money came into the Clinton household since the White House years, and a lot went out. The Clintons' tax returns show they took write-offs for more than $10 million in charitable contributions over the past eight years. Much of that money, nearly $6 million between 2001 and 2006, went to the Clintons' own family foundation.

MARK HALPERIN, "TIME" MAGAZINE: Most Americans don't have their own family charity. The Clintons have given a lot there. As long as that money eventually goes out the door to charitable organizations, I don't think people will look at it as anything unorthodox or unusual.

TODD: The returns show that between 2001 and 2006, less than half that money was given away. Only about $2.5 million. Still, tax and charity watchdog groups say the Clinton Foundation was not obligated to give even that much away.

DANIEL BOROCHOFF, AMERICAN INST. OF PHILANTHROPY: According to IRS laws, they're only required to spend 5 percent a year. They're able to get the tax benefits immediately, and then they can give it out later.

TODD: A Clinton campaign spokesman says in 2007, the family stopped the trend of holding the money in the foundation and moved about $3 million to other charities, including at least one donation that may have at least created the appearance of helping Hillary Clinton politically.

UNIDENTIFIED MALE: From the Clinton Family Foundation, a check for $100,000.

TODD: That was for a South Carolina library named after one of Hillary Clinton's mentors. The donation was made in July 2007, one day after Senator Clinton took part in a presidential debate in South Carolina.

(END VIDEOTAPE)

TODD: Now, a campaign spokesman says that donation had been designated months before that and was not politically motivated. And the Clintons do get credit from at least one charity watchdog group. The head of the American Institute for Philanthropy says the 9 percent of their income they've given to charity over the past eight years is very high compared to what most Americans give, Wolf, as a percentage.

BLITZER: Could they have taken more deductions when all is said and done?

TODD: At least one tax expert told us they could have. His quote was, "They left a lot on the table." He said a lot of other wealthy families are much more aggressive in their tax returns. He said these were very conservative.

BLITZER: Brian, thanks very much.

Brian Todd watching the numbers for us.

So what could Condoleezza Rice bring to John McCain's presidential ticket? Our senior political analyst, Bill Schneider, is joining us now from Los Angeles. He's watching this story.

It's sort of intriguing, Bill. Would it make any sense for McCain to ask Condoleezza Rice to be his running mate?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, in some ways it would, but it would be risky. Very risky.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): It sounds like a no-brainer. John McCain's Democratic opponent will either be a woman or an African- American. How about McCain putting a woman and an African-American on his ticket?

If McCain wants to run on experience, secretary of state and former White House national security adviser Condoleezza Rice has plenty of that. There's only one problem.

CONDOLEEZZA RICE, SECRETARY OF STATE: I have always said that the one thing that I have not seen myself doing is running for elected office.

SCHNEIDER: Really? Mr. Senor, former spokesman for the U.S. occupation in Iraq, reported that Rice recently attended a meeting of conservative leaders. Was she sending McCain a signal?

MCCAIN: I did not hear that. I missed those signals.

SCHNEIDER: So did the State Department.

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: If she's actively seeking the vice presidency, then she's the last one to know about it.

SCHNEIDER: Well, that may have been true for Dick Cheney in 2000 as well. Putting Rice on the ticket would instantly bind McCain even tighter to President Bush's Iraq policies, which would reinforce the Democrats' argument.

CLINTON: President Bush is determined to continue his failed policy in Iraq until he leaves office. And Senator McCain will gladly accept the torch and stay the course.

SCHNEIDER: Democrats might finally be able to get their point across that a McCain victory would amount to a third term for George W. Bush.

OBAMA: But he's basically running for a third Bush term.

(END VIDEOTAPE)

SCHNEIDER: The Democrats are running on change. With Rice on the ticket, McCain's theme would be continuity. Is that what he wants to run on, Wolf?

BLITZER: Good question. And there's no indication really based on everything I've heard she's actually going out of her way to run for this vice presidential spot, is there, Bill?

SCHNEIDER: There's no clear indication, but there's still the question, if she did attend that meeting of conservative leaders, what was she doing there?

BLITZER: Well, maybe she was trying to promote policies in the Middle East. Who knows?

All right, Bill. Thanks very much for that.

Barack Obama has been outspending Hillary Clinton on ads in Pennsylvania. But has that helped him close the gap in polls there? You're going to find out some surprising new numbers.

Also, now that Mark Penn's been forced to resign from his senior post in her campaign, might we see a different Hillary Clinton?

And it's the trial involving the so-called D.C. Madam. There may be testimony from a man who admits previously being involved with her service. He's a sitting U.S. senator. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In politics, as you know, the money and the message are critical. Right now both Barack Obama and Hillary Clinton are using their money to try to get their messages out to the voters in Pennsylvania. But judging by some fresh poll numbers, it appears Obama's strategy is giving him, at least for now, a little bit of a lift.

CNN's Dan Lothian is bringing politics to the people with the CNN Election Express.

What are you seeing about Obama apparently cutting into Hillary Clinton's lead in Pennsylvania a little bit, Dan?

DAN LOTHIAN, CNN CORRESPONDENT: He really is cutting into that lead. You know, this is a state, Wolf, where Senator Clinton really was expected to do quite well. But Senator Barack Obama has been raising a whole lot of money and spending a lot of money here. And now it appears that it might be paying off.

LOTHIAN: But the self-described underdog appears to be closing the gap.

DONALD KETTL, UNIVERSITY OF PENNSYLVANIA: You can feel some of the air starting to slip out of Hillary Clinton's tires.

LOTHIAN: The latest CNN Poll of Polls now shows Clinton ahead of Obama by just seven points -- Clinton at 40 percent, Obama 42 percent, and nine percent undecided. Compare that to last Friday's poll. Clinton led by 11 points.

What's behind the shift?

MARK PRESTON, CNN POLITICAL EDITOR: Barack Obama is outspending Hillary Clinton three to one just on television advertising in Pennsylvania. He spent more than $3 million trying to get his name out and his message out to Hillary Clinton's $1 million.

LOTHIAN: University of Pennsylvania professor Donald Kettl says Obama also seems to do better when voters get to see more of him, like during his recent six-day bus tour.

KETTL: Bowling in Altoona, getting on buses and going around to different parts of the state, including Harrisburg, you have a feeling that the crescendo is starting to build. LOTHIAN: Until now, Senator Clinton had maintained a consistent double-digit lead in Pennsylvania. She has the strong support of the state's popular governor, Ed Rendell. And Philadelphia mayor Michael Nutter. Clinton also has traditionally done well with working class voters. It's a group with considerable influence in the upcoming primary, and both Democratic candidates are fighting to close the deal.

Political observers point out that polls are not votes, and there's still a lot of time for anything to happen.

KETTL: Well, we've got two weeks left before the primary, and the way this campaign has gone, that's an eternity if you just look at what's happened just day by day, let alone week by week, along the way.

(END VIDEOTAPE)

LOTHIAN: Wolf, I asked a political analyst whether he felt the controversy over Senator Clinton's chief strategist would impact her lead in this state. He said it really is too early to tell, but at the very least, it does distract the campaign at a time when they should be focusing 100 percent on their message -- Wolf.

BLITZER: Thanks very much, Dan, for that.

Dan's with the CNN Election Express in Philadelphia.

With Hillary Clinton and Barack Obama locked in battle for the Democratic presidential nomination, there's a push online for a unity ticket featuring both of these candidates.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it's a push for a Clinton/Obama ticket, and preferably in that order, says the founder of voteboth.com. Adam Parkamenko (ph), who recently left Hillary Clinton's campaign last month, a former Clinton staffer who's now trying to start a movement for a joint ticket, Parkamenko says that he's registering today with the Federal Elections Commission. That will allow him to fund-raise and then push the kind of swag that you can already find popping up online.

Now, he's already got some experience in this area of draft sites. In 2002, setting up the unofficial draft site votehillary.org. He says that this site is unconnected in any way to the Hillary Clinton campaign.

Talk of a joint ticket swirled last month. Former President Bill Clinton suggested that Clinton/Obama would be unstoppable. Senator Obama shot that down. And a "USA Today"/Gallup poll last month also tested the enthusiasm for the concept and found that more Democrats would want to see Barack Obama in that top spot -- Wolf. BLITZER: Thanks very much, Abbi. We'll see if that dream ticket, as it's called, has any possibility.

In the "Strategy Session," the great vice presidential name game is under way right now with one name being knocked down.

(BEGIN VIDEO CLIP)

MCCORMACK: She plans ongoing back west of the Mississippi to Stanford when she's completed her work as secretary of state.

(END VIDEO CLIP)

BLITZER: But if not Condoleezza Rice, then who would be the right fit for Senator McCain?

And another shakeup in the Clinton campaign. Will the chief strategist Mark Penn's demotion change Senator Clinton's message on the campaign trail? All that and more coming up.

Donna Brazile and Bill Bennett, they're standing by right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Returning now to the ouster of Mark Penn as the senior strategist on the Hillary Clinton campaign, one Clinton adviser told "The Wall Street Journal" -- and I'm quoting now, "There won't be a tear shed."

Penn was disliked by many in the campaign. He was known for some shouting matches with other advisers. Penn has also been criticized for urging Clinton to stress her experience and her insistence that she's ready to be president on day one. Penn is also credited for Clinton's so-called 3:00 a.m. ad.

Some Clinton advisers say this stressing of Clinton's experience has actually hurt the campaign, as voters actually want change more than experience. Penn has a long history with the Clintons, helping Bill Clinton's 1996 re-election by urging him toward a so-called centrist approach.

Will Penn's demotion hurt or help Senator Clinton's presidential campaign.

Let's discuss in our "Strategy Session" with the Democratic strategist and CNN contributor, Donna Brazile, and our CNN contributor, William Bennett, better known as Bill Bennett, of the Claremont Institute.

Guys, thanks for coming in.

What's the answer, does his demotion help or hurt the campaign?

DONNA BRAZILE, CNN CONTRIBUTOR: I think his decision to leave the head of the table will give others around the table an opportunity to have their voices heard. Mandy Grunwald is a fantastic media consultant, Howard Wolfson is a great strategist, Jeff Garen (ph) is a great pollster. So, Senator Clinton has a deep bench.

Mark Penn will still be involved in, I hear, the mail (ph), and also some of the polling. So, while he may not sit at the head of the table, he's still around the table.

BLITZER: Will we see a different Hillary Clinton, though? A different message emerge?

BRAZILE: You know, I've seen it already. I've seen it in her approach to the voters in Pennsylvania. And, I mean, she's looser. She's talking about the issues that voters care about.

I don't think Mark had anything to do with what came out of her mouth. Perhaps Mark, you know, tried to pigeonhole her as the experienced candidate, but now we're going to see Hillary Clinton just fight to the finish.

BLITZER: What do you think, Bill?

BILL BENNETT, CNN CONTRIBUTOR: Well, I think it's too late and there are too many things going on, there's too much pressure to be different. Just, the pressure is so great, you just have to go back and be who you are. I take it no love lost here among Mark Penn and a lot of the people.

BLITZER: But isn't that normal in most campaigns?

BENNETT: Sure.

BLITZER: You get a lot of big egos, and you've got a lot of forceful issues that have to be addressed.

BENNETT: I wouldn't make too much out of it, except she's having a bad couple weeks. And this is indicative of the couple weeks she's having.

You know, Barack Obama makes a mistake with the Reverend Wright problem. She seems to make a bigger mistake with the Bosnia thing. She's having a rough go of it. This is not the first person to resign.

BLITZER: You're a good insider when it comes to Republicans. Is this talk of Condi Rice as John McCain's running mate serious, or is it just baloney?

BENNETT: Well, I know where it came from, Dan Senor, who's I think a straightforward guy. Look...

BLITZER: He's a former Bush administration official who served with Paul Bremer in Iraq.

BENNETT: You know, is there a more impressive human being around just in terms of her talents and abilities? There aren't very many. She's a terrific person. But oddly, even though she's got these great strengths, what does she do for John McCain? He's already got great credentials on these issues -- foreign policy and so on.

The State Department, I mean, we call it Foggy Bottom for a reason. It's not a model of clarity. And, you know, he doesn't reassure the base. And I think John McCain still has to reassure the base for that vice presidential candidate.

BLITZER: But if there's a woman Democratic nominee, or an African-American Democratic nominee, she would bring both on the Republican ticket, if you will.

BRAZILE: Oh boy, what excitement. Look, Condoleezza Rice is going back to California. She's made that quite clear to a number of her friends and associates. And I think she's comfortable with the fact that she's going to return to academia.

Look, Condoleezza Rice doesn't really have to wait for a man to offer her number one or number two. She can go out there, and if she wants to run for president in 2012, there will be opening on the Republican side, because I suspect that Clinton/Obama will win on the Democratic side.

BLITZER: She's still a young woman, in her early 50s, so she's got a huge future ahead of her.

BENNETT: Arguably, she's needed more in the academy than anywhere else. There aren't a whole lot like her.

BLITZER: When you say the academy, you mean university?

BENNETT: University. There aren't a whole lot like her.

BLITZER: All right. Let's talk about Charlton Heston. Coming up, I'm going to play some clips of my interviews with him over the years.

But he passed away. He was a lion. He was a giant as an actor. All of us remember "The Ten Commandments" and "Ben-Hur." But in recent years he really has been active with the National Rifle Association and in Republican politics.

BENNETT: Yes, he surely was. But I didn't like the headline in "The Washington Post." It said, you know, from actor to activism.

He was also active in the '50s and '60s. He marched with Martin Luther King -- Gregory Peck, Sammy Davis Jr., and Charlton Heston. So he needs to get credit for those activities too.

I think he very much believed in it. I think he believed in the Declaration of Independence. I think he believed in the Constitution. I knew him pretty well. I know you did, too. He was very, very impressive.

I called him when he wrote me about his Alzheimer's, and I said, "I feel so badly for you." And he said, "I don't want your sympathy, damn it." He said, "I want you to react the way a friend of mine did, who said, "Heston, you're the only famous person I know, and now you won't even remember me because of your Alzheimer's." He said, "That's the kind of reaction I want."

A lion, you said. A strong man.

Elayne and I went to his 50th wedding anniversary in Hollywood. An unusual kind of thing for us to do. It was a fabulous party. He was quite a guy.

BLITZER: We all grew up watching his movies, and whatever you think of his politics, you know, he was unique on the screen.

BRAZILE: Well, he showed up when it mattered in the civil rights struggle. He was with Martin Luther King. He headed up the Screen Actors Guild. He was an activist. He was a champion of civil rights. And so we honor his memory.

BLITZER: And we honor his creativity and his genius as an actor as well.

BENNETT: Can I say one other quick thing?

BLITZER: Sure.

BENNETT: Michael Huffington was running for Senate in California. You remember, Arianna Huffington's...

BLITZER: Ex-husband.

BENNETT: ... ex-husband. And I said, "You know, maybe you ought to run, Chuck." And he said, "Well, I can't run against Huffington. He's holding up your book of virtues." I said, "Chuck, you've got a better book, 'The Ten Commandments.'"

BLITZER: Yes.

BENNETT: "Hold it up. You're the man."

BLITZER: I remember that movie well.

BENNETT: Yes, sir. Moses.

BLITZER: All right. Thanks, guys, very much.

BENNETT: Thank you.

BLITZER: It's pretty unusual for a U.S. senator to testify in a criminal trial, but it actually could happen to one U.S. lawmaker pretty soon. You're going to find out who's on the witness list in a high profile case.

Plus, it's supposed to be a symbol of unity, but the Olympic torch is bringing out a lot of anger. Perhaps more anger than cheers. Will it continue on its journey around the world? A live report just ahead.

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BLITZER: On our political ticker, President Bush calls the film legend Charlton Heston an advocate for liberty. The Oscar-winning actor died, as you know, at his Beverly Hills home on Saturday. He was 84 years old.

I spoke to him on November 1, 2000, only days before the elections of that year. We talked about Hillary Clinton's Senate campaign in New York.

(BEGIN VIDEO CLIP)

BLITZER: If defeating Vice President Al Gore is priority number one, some of your supporters have suggested that defeating Mrs. Clinton in her bid for the Senate from New York State is priority number two.

Is that fair?

CHARLTON HESTON, ACTOR: You could say there's a good deal of opposition to the first lady. I've only met her once.

BLITZER: And so that's not necessarily priority number two?

HESTON: For the NRA?

BLITZER: Yes.

HESTON: It's -- I think for the entire Republican Party it's of course an important issue, to hold a seat in the Senate.

(END VIDEO CLIP)

BLITZER: Charlton Heston was president of the NRA from 1998 to 2002. I spoke to him in 1999 about gun registration.

(BEGIN VIDEO CLIP)

HESTON: The problem with registration is it leads to collecting names and numbers. And every country where that happens, there's always the possibility that at 3:00 in the morning comes a knock on your door.

BLITZER: Well, people have to register their cars, but that doesn't necessarily lead to confiscation of people's cars.

HESTON: I think in this country taking names and numbers is offensive to the American people.

All of us grew up watching him on that big screen and can't forget him. And I know you can't either, Jack.

CAFFERTY: Well, I'll tell you how old I am. I remember as a kid just not hardly being able to wait until "The Robe" opened at the Tower Theater on South Virginia Street in Reno, Nevada.

My mother forced my brother and me to go to catechism classes and subject ourselves to what we thought at the time were rather unreasonable demands of the nuns and the priests who worked at the local parish. I learned more about Catholicism and Christianity in the three and a half hours sitting in the dark of that movie theater than I learned in all the afternoons that I spent listening to those tedious, boring nuns trying to drum that stuff into our heads.

He was a giant. That movie was a landmark in my childhood.

The other one, of course, was "Ben-Hur," and I can remember equally looking forward to that. But the lasting impressions of "Ben- Hur" were not as great as the stuff I learned about my church from "The Robe." It was quite a moment.

All right. On to other stuff.

The question this hour: How can Hillary Clinton turn things around in the next couple of weeks? She's dropped the story about the hospital in Ohio from her speech. She had to demote her guy for going to Columbia and working against her wishes. Her poll numbers are collapsing in Pennsylvania. It hasn't been a good weekend for her.

Sean writes in Hayward, Wisconsin: "Hillary's hospital story has caught her in another lie. She sidesteps it by saying she was told this by someone else, and never got around to checking if it was true. Isn't that the same excuse that she used for voting for the war in Iraq? Her learning curve is not very impressive."

Janice from California writes: "She hires a top strategist who does high profile pro-NAFTA work while running her campaign. She sends her husband to South Carolina, loses the black vote overnight. She can't remember the difference between a flower greeting and sniper fire. Forget the 3:00 phone calls, I don't trust her judgment at 3:00 p.m."

Sarah writes: "You're a drama queen, Jack. Sorry, most of us sane people out here don't think Hillary had a bad weekend. We know how biased you and the other loud mouth Hillary haters in the so- called news organizations are. You all make a scandal where there is none."

Fred in Pennsylvania: "Hillary can turn it around by changing the goal. It's got to be getting obvious even to those inside the bubble. Her chances of winning this nomination are slim and getting slimmer every day. She has, however, shown herself to be the toughest, most resilient candidate in modern memory. If she were to change her goal to take over Harry Reid's position in leading the Senate, she could come out of this election in perfect position to advance her agenda where the law actually gets made. I hope she does."

Sherri in Canada: "I think if she quits talking outside the issues, quits telling stories, she may hang on to her seven to nine percent victory in Pennsylvania. Just a note to all those bashing the media as being anti-Clinton: Senator Clinton is the person saying these things. The media just reports it."

And Robert writes: "If I knew, I wouldn't tell her" -- Wolf.

BLITZER: All right, Jack. Thank you.

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